President Muhammadu Buhari yesterday assented to the Minimum Wage Repeal and Enactment Act 2019, thus increasing the country’s minimum wage from M18, 000 to N30,000.
Presidential adviser on National Assembly (Senate), Sen Ita Enang told State House Correspondents that the implementation of the new minimum wage takes effect from yesterday when the president approved it.
The National Assembly last month passed the bill with N3,000 higher than the N27,000 proposed by the executive.
Enang said: “President Muhammadu Buhari has assented to the Minimum Wage Repel and Enactment Act 2019.
“This makes it compulsory for all employers of labour in Nigeria to pay to their workers the sum of N30,000. And this excludes persons who are employing less than 25 workers, persons who work in a ship which sails out of the jurisdiction and other persons who are in other kinds of regulated employment which are accepted by the Act.
“It also gives the workers the right if you are compelled by any circumstance to accept salary that is less than N30,000, to sue your employer to recover the balance and authorises the minister of labour and any person nominated by the minister of labour, or any person designated by the minister of labour in any ministry, department or agency to, on your behalf, take action in your name against such employer to recover the balance of your wages.
“It also ensures and mandates National Salaries, Income and Wages Commission and the Minister or Labour, to be the chief and principal enforcers of the provisions of this law. And this law applies to all agencies, persons and bodies throughout the Federal Republic of Nigeria.”
“It has been assented to today (yesterday), it takes effect today, (yesterday) except such other provisions as are contained in the Act. But the enforcement and the right to start the implementation of the provisions commence today (Thursday), including such steps that are to be taken gradually under the provisions of the Act.”
Senate President Bukola Saraki congratulated the Nigerian workers on the assent of the N30,000 minimum wage into law. “This reviewed wage, which is aimed at increasing the productivity of Nigerian workers, is a good step in the right direction for our nation’s workforce — who are the lifeblood of our dear country.
Govs’ forum reacts
There was no official comment fron Nigeria Governors’ Forum (NGF) as at press time yesterday. However, a source in the organization told Daily Trust that the governors will not object to it since there will be more money to pay the minimum wage.
“The palliatives have been made clear, the circumstances concerning this development has also been made clear. There is therefore nothing the governors would argue about. Already the Rewane Committee has given advice on where to source for more funds to finance it. So I believe that governors will not object to it because it has been made clear that there will be more money; and the conditions for signing has been made clear so there is no need for arguments,” the source said.
Labour, NECA commend Buhari
The Nigerian Labour Congress has hailed the President Buhari signing the new minimum wage bill..
Speaking to Daily Trust, Comrade Benson Upah who is the Head of Department of Information, Nigerian Labour Congress said the president had taken the necessary actions.
He said: “We are delighted with Mr. President, we urge him to commence the immediate implementation of the bill. We commend him for having the courage to sign the bill into law.”
The Nigeria Employers’ Consultative Association (NECA) also commended President Buhari.
While speaking in Port-Harcourt, the Director-General of NECA, Mr. Timothy Olawale commended the President for this significant action. He said:”Organized Businesses wishes to commend the President for promptly attending to the National Minimum Wage Bill as sent to him by the National Assembly. It is an indication of the passion and concern of the President for the welfare of the masses and working class in particular. We believe that the implementation date will be the date of assent.”
Shedding light on the conclusions of the Tripartite Committee on National Minimum Wage, the NECA Boss affirmed that “the National Minimum Wage is not a general salary increase but a wage below which no employer should pay. As such, employers who are already paying above N30,000 are not obligated to comply. In the same vein, we expect other Social Partners to also respect this understanding, so as not to jeopardize the industrial harmony in the Private Sector by insisting on implementation by organizations already paying above N30,000.”
While affirming organized businesses’ commitment to the implementation of the new minimum wage, Mr. Olawale stated that “we reiterate the commitment of employers in the private sector to the implementation of the new National Minimum Wage.”
He advised “employers to note the date of implementation and seek clarification, when in doubt”.
How states, councils can pay – Lagos chamber
The Lagos Chamber of Commerce and Industry (LCCI) yesterday urged the federal government to review the current revenue allocation formula to enhance the capacity of the states and local governments to cope with the new minimum wage.
Speaking to Daily Trust yesterday LCCI Director General, Muda Yusuf, said the current state of finances of state and local governments, most of them may find it difficult to pay.
“The trouble with the public service across all levels of government is the unsustainable workforce that they are carrying. There are also too many political appointees at all levels of government. There are also instances of ghost workers in many of the states and local governments. These are the fundamental issues in the capacity of the states and local governments to pay decent wage.
“Current workforce in many of these jurisdictions are not sustainable. There are also instances of fiscal leakages, issues of value for money in expenditure and the quality of expenditure priorities. If the right things are done, capacity to pay should not an issue”
While lauding President Buhari for signing the bill into law, Yusuf said most private sector institutions are already paying well over the N30, 000 minimum wage.
“The minimum wage conversation is more of an issue for the public sector than the private sector. Although many MSMEs may have some challenges in complying owing to the numerous impediments and burden of the business operating environment. Many of them are in fact struggling to remain afloat. Some employers in this category sometimes even borrow to pay salaries of workers. So the MSMEs, capacity may be an issue”, he stated.
He said with the increase, there should be quality spending by government in education, health care, transportation, agriculture to provide food and social housing and many more.
Implications of new minimum wage – Prof Muttaqa
According to Professor Muhammad Muttaqa of the Economics Department of the Ahmadu Bello University (ABU), Zaria, the new minimum wage may bring about growth of industries or inflation.
He said: “There are many things. One, the economy is depressed. People don’t have enough income to take care of their needs. That affects the growth of industries. Industries produce goods and services but people don’t have money to buy. If you lift people’s income, you are indirectly increasing their purchasing power and this may lead to growth of industries, which is always good for the economy, because it increases economic activities.
“However, in the case of Nigeria, most of what we consume is imported. So, we may not see the direct impact of the increase. There is the fear that when people have enough income, they would be buying goods and services and prices of commodities would likely respond and this may lead to inflation. However, in normal economies, when there is inflation there are some fundamentals that can be used to cushion the inflation.
“Another implication of the increase is in the strengthening of the anti-corruption crusade. You can’t fight corruption when you don’t give people enough to take care of their needs to sustain themselves. If one cannot survive legitimately, he may decide to survive through illegitimate means.
“Therefore, the monetary authorities have to sit up and think out of the box to come up with measures that would counter any effects that the implementation of the minimum wage would bring. The fiscal policies here would be important and this can be done through proper monitoring of the new developments in the next three to five months.
“All these cannot be successful if the people implementing the policies don’t have proper understanding of the implication of what they are doing. They are usually after the indices rather than the performance of the economy. They would, for instance, tell you that they want to achieve 10 per cent growth without putting in place how they intend to achieve and sustain that. These are questions that they should pay more attention to rather than just the target.
“What I am saying is that the policy should start with planning. For example, if inflation comes, what are they going to sacrifice? Is it foreign exchanges; is it prices; is it fiscal size? But if you don’t have the experts, nothing can be achieved.”
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